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Bulb takeover saga sheds light on ‘disgraceful’ lack of transparency

<span>Photograph: Clive Sherlock/Alamy</span>
Photograph: Clive Sherlock/Alamy

Selling a nationalised energy supplier, even one with 1.5 million customers, ought to be a simple process. First, you invite bids. Second, you assess the proposals, weighing them against criteria such as deliverability, value for money for taxpayers and likelihood of increasing competition. Third – and this is the critical bit – you explain your decision.

With Bulb, even as a court on Wednesday approved the transfer to Octopus Energy, we’re still none the wiser about the main financial points. Octopus is said to be paying £100m to £200m but no minister has confirmed the figure. Nor do we know why Octopus was chosen, or the size of the financial assistance being advanced from public coffers to enable the buyer to complete the deal.

Meanwhile, the government disputes the Office for Budget Responsibility’s estimate that the bailout of Bulb will cost £6.5bn, but declines to set out why it expects a “much lower” figure. Instead, it mutters about cashflows in two directions and says it’s all terribly complicated. The level of transparency, as argued here previously, has been disgraceful.

It is why one hopes E.ON, Centrica and Scottish Power, who have filed papers to request a judicial review, succeed in forcing some openness. Yes, these big beasts of the energy supply industry have a commercial self-interest in extending the legal process, but the rest of us also want a few answers since we will eventually pay through our energy bills for the failure and rescue of Bulb.

The best outcome now would be for Grant Shapps, the business secretary, to do what he should have done at the outset and explain his thinking. There may have been good reasons, for example, for rejecting Centrica’s idea that Bulb’s customers should be parcelled out among the rest of the industry. But simply asserting that the Octopus transaction represents “value for money for taxpayers” is not good enough. If the terms are terrific, let’s see them.

If only to avoid this saga becoming even messier, Shapps should speak up – soon.

Relaxing the ringfence on banks isn’t as radical as it sounds

Get ready for “big bang 2.0”, a post-Brexit carnival of rule-shredding that will supposedly save the City from slow suffocation. That, at least, is the gist of the messaging from Andrew Griffith, economic secretary to the Treasury. Thankfully, one of his big ideas – a relaxation of the ringfencing rules on banks – may be less radical and less potentially dangerous than it sounds.

Lest we forget, ringfencing – meaning the separation of banks’ UK retail operations from other activities such as investment banking – was introduced for good reasons after the crash of 2008. One was that UK has an outsized banking sector compared with the size of its economy. Thus we should tread more carefully than, say, the US in terms of safety features such as the requirement to have separate pools of capital. The arrangement may feel cumbersome for banks – but it’s probably better for them than higher capital requirements.

The good news, then, is that Griffith’s idea of a relaxation of ringfencing seems to be confined to small lenders such as the UK division of Santander, Virgin Money and TSB. The likes of HSBC, Lloyds, NatWest and Barclays would be unaffected. If that’s the extent of the thinking, fine. There has always a fair argument that ringfencing had the undesired effect of making it harder for smaller banks to compete against bigger rivals.

But let’s not slip into something more fundamental. It took years to construct the ringfences and, to date, they appear to have been a force for financial stability.

Closing HSBC branches should open more phone lines

Axing a quarter of its UK branches – from an already shrunken network – is brutal stuff, even by HSBC’s standards. There is, though, a certain inevitability about the retreat, assuming the lender is correct in saying some of the 114 branches earmarked for closure are serving fewer than 250 customers a week.

But Tobias Gruber, founder of loan broker My Community Finance, makes a fair plea for HSBC to reinvest some of the savings into hiring a few telephone operatives. “It’s unacceptable for bank customers to wait up to 30 minutes to speak to someone when it’s their only choice because their local branch has vanished,” he says.

Absolutely right. Not everybody wants to navigate an app. And not everybody wants to type into a “live chat” service, a bane of modern life. Sadly, HSBC’s boast about how use of its chat function has “increased tenfold in the last three years” suggests the bank prefers the impersonal approach. Just answer the phone.